Bass fears for Tasmanian mine viability

Shares in base metals and gold miner
Bass Metals
have been suspended from trading as it may not be able to meet debt repayments amid concerns its Tasmanian operations are becoming financially marginal.

Waste rock has diluted the grades of ore produced at the cash-strapped miner’s Fossey underground mine and Hellyer processing facility south of Burnie in Tasmania.

The company said mining costs in the December quarter were 11 per cent over budget expectations.

Bass Metals on Wednesday reported to the stock exchange that it had re-assessed the financial performance of the Tasmanian project.

It said it was concerned there could be a significant deterioration in the economics of the project, which could become marginal given the strong Australian dollar.

The company is reviewing and updating mining and processing schedules and budgets, but the signs are worrying.

Related Quotes

Company Profile

The miner hopes to complete an updated operating plan and reach agreement with its secured financier regarding an extension to its existing debt repayment schedule by February 10.

“Until these issues are resolved, the company has scaled down mining activities and plans to treat all stockpiled and possibly readily accessible ore, whilst reviewing longer-term mining options," Bass Metals said.

“Expenditure on all non-essential activities including exploration has been curtailed to preserve cash flow and stabilise the business in the short term."